By Karl Plume
CHICAGO, April 28 (Reuters) - Soaring crude oil markets have pushed soybean oil prices to the loftiest levels in more than three years, a boon for oilseed processors like Bunge Global and Archer Daniels Midland, which have seen North American soy crush margins swell to their highest since Russia invaded Ukraine in 2022.
The windfall is supporting profits for the agribusinesses and taking the sting out of rising energy costs for processing and shipping grain, as well as the global trade
disruptions stemming from tariff battles and the Iran war.
It is also prompting some analysts to raise their 2026 profit outlooks for the two bellwether grain traders, which are also benefiting from higher biofuel blending mandates released by the U.S. Environmental Protection Agency last month after a lengthy delay.
Bunge is due to report its quarterly results on Wednesday, followed by ADM next week.
Both companies are expected to report lower first-quarter earnings compared with strong profits in the same period a year earlier. But they are also likely to raise their 2026 profit guidance due to a strong oilseed processing outlook and as the EPA's biofuel mandate announcement removed the uncertainty weighing on results in recent quarters.
Those factors, realized late in the first quarter, reflect a "jaw-dropping improvement in North America," analyst Heather Jones of Heather Jones Research said in a note.
Jones raised her earnings-per-share estimate for Bunge to 95 cents in the first quarter, from 92 cents previously, and lifted her full-year 2026 outlook to $9.15 per share, from $8.03 previously. For ADM, her 2026 profit outlook rose to $4.36 a share from $3.98, but one-off items were seen dragging down its first-quarter results.
Stephens Inc raised its first-quarter estimate by 12 cents to 93 cents a share for Bunge, but trimmed its estimate by 4 cents to 62 cents a share for ADM.
Bunge last projected its 2026 adjusted profit at $7.50 to $8.00 per share, while ADM in February forecast its 2026 earnings at between $3.60 and $4.25 a share.
SOY CRUSHING AT NEAR-MAXIMUM CAPACITY
Oilseed processing has been a lucrative business for agribusinesses after soaring demand for making biofuel from plant oils like soyoil ignited the largest-ever U.S. crushing expansion in recent years. Elevated soyoil prices may continue to support robust crush margins as crude oil prices remain high due to global supply disruptions caused by the Iran war.
But the benefit for soy crushers is limited as the processing pace is already at near-maximum capacity, while high construction costs, including tariffs on steel and aluminum and higher interest rates than a few years ago, are discouraging further expansion. New plant construction normally takes at least three or four years from concept to opening.
One new crush plant is due to open later this year, and two expansions of existing plants are also expected to come online, according to processing industry sources.
(Reporting by Karl Plume in Chicago; Editing by Emily Schmall and Paul Simao)
